ResponsibleSteel Proposals and Consultation Questions on …...ResponsibleSteel proposals and...

ResponsibleSteel Proposals and Consultation Questions on GHG Emission Requirements for the Certification of Steel Products

Draft Version 1.1

01 September 2020 (C8.6 corrected 06 October 2020)

worldsteel / Seong Joon Cho

ResponsibleSteel proposals and consultation questions on GHG emission requirements for the certification of steel products 2

Table of ContentsBackground .................................................................................................................................................... 3

About this document ..................................................................................................................................... 4

Climate Change and Greenhouse Gas Emissions – additional requirements for the certification of steel products ......................................................................................................................................................... 5

Criterion 8.6. Crude steel GHG emissions intensity: performance thresholds for steel product certification ..... 8 Criterion 8.7. Crude steel GHG emissions intensity threshold determination: specifications and calculation ... 9 Criterion 8.8. Steel Product GHG emissions data ............................................................................................. 19 Criterion 8.9. Transparency and comparability of GHG emissions data .......................................................... 20

Annex 1a (for information): Glossary (previously approved) ........................................................................ 21

Annex 1b (for consultation): Glossary (new or updated terms) ..................................................................... 22

Annex 2 (for information): Principle 8. Climate Change and Greenhouse Gas Emissions requirements in approved Standard ...................................................................................................................................... 26

Criterion 8.1: Corporate commitment to achieve the goals of the Paris Agreement ................................. 26 Criterion 8.2: Corporate Climate-Related Financial Disclosure ................................................................... 27 Criterion 8.3: Site-level GHG emissions measurement and intensity calculation ....................................... 27 Criterion 8.4: Site-level GHG reduction targets and planning ..................................................................... 28 Criterion 8.5: Site-level GHG or CO2 emissions reporting and disclosure ................................................... 30

Annex 3 (for information): data used as basis for estimate of current median crude steel GHG emissions intensity ....................................................................................................................................................... 32

Annex 4 (for information): Drafting Principles .............................................................................................. 35

Annex 5: Discussion and Consultation Questions .......................................................................................... 38 Consultation question on the proposed focus on two aspects of GHG emissions performance ...................... 39 Consultation question on threshold based on proportion of scrap used for crude steel production ................ 41 Consultation question on minimum threshold for steel product certification based on global median GHG emissions performance .................................................................................................................................... 42 Consultation question on identification of better sources for GHG emissions intensity performance data for crude steel ........................................................................................................................................................ 42 Consultation question on ResponsibleSteel specification of GHG accounting rules ......................................... 44 Consultation question on the inclusion of Upstream indirect (Scope 3a), Energy indirect (Scope 2), and Direct (Scope 1) GHG emissions in the determination of the crude steel GHG emissions intensity performance for the site .................................................................................................................................................................... 45 Consultation question on ferrous scrap ........................................................................................................... 47 Consultation question on use of the worldsteel LCI methodology as the basis for determining steel product GHG emissions allocations ............................................................................................................................... 48 Consultation question on transparency and comparability of GHG emissions data ........................................ 49


Background

In November 2019, version 1-0 of the ResponsibleSteel Standard was approved and ratified by the ResponsibleSteel membership and board. Steel sites can choose to be independently audited against the 12 Principles of this standard to demonstrate that they meet high levels of performance when it comes to environmental, social and governance (ESG) issues. Steel sites that become certified against the standard are able to claim that their site is operated in a responsible manner.

The ResponsibleSteel Standard version 1-0 contains requirements for input materials (then called raw materials) in its "Responsible Sourcing" Criterion 2.2 and for greenhouse gas (GHG) emissions in its "Climate Change and Greenhouse Gas (GHG) Emissions" Principle 8. In relation to input materials it specifies the need for certified sites to implement general policies and procedures for responsible sourcing, but does not specify levels of performance that must be met by suppliers of input materials. In relation to GHG emissions the Standard specifies the commitments that must be met by the corporate owners and managers of certified sites, and requirements to measure, monitor and report site level performance, but does not specify minimum threshold levels of performance that must be met in relation to ongoing GHG emissions.

The ResponsibleSteel membership and board agreed that further requirements for the responsible sourcing of input materials and minimum threshold levels of performance in relation to greenhouse gas (GHG) emissions would need to be met before claims could be made by certified sites about the certification status of the steel they produce. It was agreed that these additional requirements would be developed in 2020, in accordance with ResponsibleSteel’s procedures for the development of standards.

The document ‘ResponsibleSteel Requirements, Options and Consultation Questions on Responsible Sourcing of Input Materials’ covering proposed additional requirements in relation to the sourcing of input materials was published for a 60-day public consultation period on 3rd August.

This document, ‘ResponsibleSteel Proposals and Consultation Questions on GHG Emissions Requirements for the Certification of Steel Products’ now presents the proposed additional requirements relating to GHG emissions that would need to be met to allow claims to be made about ResponsibleSteel certified steel products. This document is published for a 60-day public consultation period from 1st September 2020 through to 31st October 2020.

In 2021, ResponsibleSteel will look into options for including downstream supply chains in the ResponsibleSteel certification programme. Discussions on this with our board and with members will be kicked off later in 2020.


About this document

This document presents draft versions of the additional requirements that ResponsibleSteel certified sites would need to meet in relation to their GHG emissions in order to make claims about the ResponsibleSteel certified status of their steel products.

We have provided guidance on most of the proposed criteria and requirements to explain key terms and concepts. The document also outlines some options for alternative requirements and consultation questions that we ask stakeholders to consider. Background information, options and specific consultation questions have been presented together at the end of the document, with the intent that the criteria and requirements themselves can be read without too many interruptions to the text. Internal document links to the consultation questions have been provided to help readers navigate the text.

Annexes provide the already approved requirements and glossary of terms in relation to climate change and GHG emissions so that readers understand what is already covered by our existing Standard. They also present the data that have been used to help define proposed threshold levels of performance, and general drafting principles that were developed to guide the development of the proposed criteria and requirements.

This document has been drafted by the ResponsibleSteel Secretariat based on discussions with our Board, Members and stakeholders over the last three years and is put out for public consultation with stakeholders. The proposals in this document have not been endorsed by the ResponsibleSteel Board, its Standards and Assurance Committee, or by the ResponsibleSteel membership.

We are keen to hear from stakeholders whether they support our draft proposals, whether they prefer any of the provided options and what their opinions are on the consultation questions we are posing to them. If stakeholders feel that there are other approaches not outlined here that would be better placed to achieve ResponsibleSteel’s objectives we very much appreciate hearing them. Stakeholders are asked to submit their feedback on the draft requirements, options, consultation questions and Annexes to ResponsibleSteel by 31st October 2020 via the Google form on https://forms.gle/gVri4fVie5nswzXf7.

Following the public consultations on both input materials and GHG emissions, we will collate and review the received feedback. We are planning to hold working group meetings and a second round of public stakeholder consultation on both input materials and GHG requirements towards the end of 2020, and before the draft requirements are put to our Members and our Board for approval and ratification. We aim to have completed both work streams on input materials and on GHG, if consensus can be reached across our Membership, in Spring 2021.

If you have any questions on the proposed GHG emissions requirements, please contact:

Matthew Wenban-Smith Policy & Standards Director [email protected]


DRAFT Requirements

Climate Change and Greenhouse Gas Emissions – additional requirements for the certification of steel products

Objective:

The objective of ResponsibleSteel Principle 8 for site certification is that, “The corporate owners of certified sites are committed to the global goals of the Paris Agreement, and both certified sites and their corporate owners are taking the actions needed to demonstrate this commitment.”

The objective of the additional criteria required for the certification of steel products is to provide the basis for downstream users and specifiers of steel, policy makers and other stakeholders to support steelmakers in their efforts to reduce GHG emissions in the steel supply chain through their specifications, purchasing commitments, investment decisions, policies or other actions based on the recognition of ResponsibleSteel certified steel products.

Introduction:

Principle 8 of the ResponsibleSteel Standard version 1-0 requires steelmakers to demonstrate their commitment to the goals of the Paris Agreement through strategic planning, goal setting, and the measurement and reporting of progress in reducing greenhouse gas emissions, as summarised in Figure 1.

Corporate recognition of a decarbonisation pathway for the steel sector that is compatible with the achievement of the goals of the Paris Agreement

Corporate level science-based target(s) and strategy

Implementation of the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD) within three years of first certification.

Systems for measuring site-level GHG emissions, including an estimate of upstream Scope 3 emissions associated with the materials imported from outside the site boundary.

Time-specific, medium-term GHG emissions targets and plans for certified site(s), aligned with the corporate target(s) and strategy.

Monitoring and reporting of implementation.

Annual public reporting of key site-level GHG emissions data.

Figure 1. Summary of the existing criteria of ResponsibleSteel Principle 8

These five criteria are essentially forward-looking, focussed on long- and medium-term planning, performance and reporting, and are of fundamental importance if steelmakers are to make the transition to net zero steel production.

C8.5: Site-level GHG emissions reporting

& disclosure

C8.2: Climate-Related Financial

Disclosure

C8.1: Corporate level GHG reduction

commitment, targets and planning

C8.3: Site-level GHG emissions

measurement

C8.4: Site-level GHG reduction targets &

planning


The five criteria of the current Standard do not specify minimum GHG emissions performance thresholds. This is intentional. ResponsibleSteel site certification is intended to give recognition to companies and sites that are publicly committed to making the transition to a zero-carbon future. Such recognition is essential to encourage the capital investments in new, low GHG emission technologies that are urgently needed in the steel sector if the goals of the Paris Agreement are to be achieved. There will be a delay of many years between corporate commitment, investment, and the realisation of GHG emissions reductions. Excluding companies and sites from the ResponsibleSteel programme based on their current GHG emissions performance would make it harder, not easier, for many companies to make the necessary transition, as well as removing incentives for sites to meet the other 11 ResponsibleSteel Principles.

However, providing incentives for companies and sites that are committed to making the transition to low GHG emissions is not the only mechanism that ResponsibleSteel can offer to support the achievement of the goals of the Paris Agreement. A second, complementary mechanism is to provide a means for downstream companies purchasing or specifying steel, as well as policy makers defining public procurement requirements or other policy tools, to differentiate between steel products on the basis of their current GHG emissions performance, rewarding leadership by those companies and sites that have already started on the transition.

Designing the thresholds for the certification of steel products is critically important. If the thresholds are set too high, they will create a barrier to participation. Set too low, and they will lack credibility and fail to reward leadership. They need to incentivise better performance both for steelmaking using scrap, and for steelmaking from iron ore. And they need to meet the needs of downstream users who have their own commitments to reduce their GHG emissions, increasingly focussed on achieving net-zero embodied emissions for their steel supplies by 2050 or sooner.

The additional ResponsibleSteel requirements for steel product certification are designed to address these challenges. Figure 2 summarises the four proposed additional Criteria related to GHG emissions that would need to be met to allow the ResponsibleSteel certification of steel products.

Specification of minimum performance thresholds for the GHG emissions intensity of crude steel production at a site, taking account of the proportion of end-of-life scrap and iron ore used for steelmaking, so that downstream users can reward performance and drive change for all steel making routes.

Specification of globally consistent rules for calculating the GHG emissions intensity of crude steel production, to ensure a level playing field for all sites making claims about their GHG emissions performance, and ensure that differences in claimed performance are real, and not simply artefacts of different measurement methodologies.

Requirements to provide consistent, life cycle based GHG emissions data for steel products (as distinct from performance data for crude steel production itself), to allow downstream users to monitor their own upstream (Scope 3a) GHG emissions and performance in achieving their own GHG emissions reduction targets.

Requirements to make key data relating to GHG emissions intensity for crude steel, and the GHG emissions for steel products, publicly available in a readily comparable format, so that downstream users, specifiers and others can easily identify and specify steel products from the best performing companies and sites.

Figure 2. Summary of the proposed additional criteria in relation to GHG emissions for the ResponsibleSteel certification of steel products.

C8.9: Transparency & comparability of GHG

emissions data

C8.6: GHG emissions intensity performance

threshold for crude steel production

C8.7: Rules for consistent measurement of crude

steel GHG emissions intensity performance

C8.8: Steel product GHG emissions data


The proposed approach focusses on two distinct aspects of a site’s GHG emissions performance:

A. The GHG emissions associated with the site’s production of crude steel;

B. The GHG emissions allocated to the site’s products (including steel products, intermediate products, co-products and/or by-products).

The intent is that by focussing on these two indicators the standard will provide the greatest possible traction for downstream users to incentivise and reward low GHG emission steelmaking, from ‘cradle to steel product’.

Link to discussion and consultation question on the proposed focus on these two aspects of GHG emissions performance: GHG emissions intensity performance for crude steel, and on the allocation of GHG emissions

to steel products

Figure 3 illustrates key elements of the flow of materials, energy and associated GHG emissions at a steelmaking site that need to be considered to ensure the consistent measurement and reporting of these two aspects of GHG emissions performance. The two aspects of performance themselves are highlighted in Figure 3 in red. For each element of the figure, there are options as to how that element might be addressed for the purpose of calculating GHG emissions, whether for the determination of the site’s crude steel GHG emissions intensity performance, or for the allocation of GHG emissions to steel products made at the site.

Criterion 8.6 proposes the basis for setting minimum threshold levels of performance in relation to the site’s GHG emissions performance for the production of crude steel, in terms of tonnes of GHG emitted per tonne of crude steel produced.

Criterion 8.7 proposes the basis for the consistent measurement of the GHG emissions intensity for the site’s production of crude steel, to ensure that the performance of all ResponsibleSteel certified sites are assessed on the same basis as to whether they have achieved the required minimum threshold for the certification of their products.

Figure 3: schematic diagram of the flow of materials, energy and associated GHG emissions at a steelmaking site

Upstream indirect (Scope 3a) and indirect (Scope 2) GHG emissions

GHG emissions associated with intermediate products used internally

GHG emissions allocated to exported intermediate products, co-products andsteelproducts,

4. Post-production processing on site

e.g. hot rolling, cold rolling, casting, coating, etc

• Pellets

A. Crude steel GHG emissions intensity performance

1. Input materials

• Ferrous raw material (concentrate, direct reduced iron (DRI), fines, granulated pig iron (GPI), hot briquetted iron (HBI), lump ore, pellets, pig iron, sinter)

• External scrap(manufacturing scrap, end of life scrap)

• Ferro alloys (Al, B, Co, Cr, Mg, Mn, Mo, Ni, Nb, P, Si, Ti, V, W)

• Non-ferrous metals (e.g. Al, Mg, Sn, Zn)

• Process coal, coke and charcoal

• Lime, dolomitic lime, dolomite, limestone

• BF and slag additives• Desulfurizing products• Industrial gases (Argon,

Hydrogen Oxygen, Nitrogen)• Transportation of input

materials• Imported energy (electricity,

steam)

Upstream indirect (Scope 3a) and indirect (Scope 2) GHG

emissions

2. Intermediate processing on site

e.g. coke oven, sinter plant, lime kiln, pellet plant, blast

furnace, DRI, etc

Intermediate products and co-products exported from site:• Coke• DRI, GPI, HBI, Pig iron• Slags• Energy• Process gases, dust, sludge,

chemicals, oils, etc

• Waste

B. GHG emissions data provided for exported co-products and intermediate products

Intermediate products and co-products exported from site:• Crude steel• Slags• Energy• Other by-products e.g.

process gases, dust, sludge, chemicals, oils, etc

• Waste

B. GHG emissions data provided for exported co-products and intermediate products

Steel products:• Steel coils• Coated steel• Other products

• Waste

B. GHG emissions data provided for exported steel products

3. Crude steel production

Exported intermediate products or co-products,

with GHG allocation if applicable

Intermediate products for crude steel

production

Crude steel for further processing on site

Exported intermediate products or co-products,

with GHG allocation if applicable

Direct (Scope 1) GHG emissions

Steel products with GHG allocations as applicable



Internal use of scrap, energy; on site carbon capture & storage, etc


Criterion 8.8 proposes the basis for allocating GHG emissions to the steel products, intermediate products, co-products and/or by-products produced at the site.

Criterion 8.9 then proposes requirements in relation to the accessibility of the resulting performance measures, to facilitate their use by downstream users, specifiers, policy makers and other stakeholders, to reward performance.

Further consultation questions on each of these aspects are embedded in the text, below.

Criteria, Requirements and Guidance:

Criterion 8.6. Crude steel GHG emissions intensity: performance thresholds for steel product certification

The GHG emissions intensity of the crude steel produced at the site, measured in accordance with ResponsibleSteel requirements, is below the applicable threshold required for ResponsibleSteel steel product certification.

8.6.1. The GHG emissions intensity (metric tonnes of CO2 equivalent/ metric tonne crude steel) of the crude steel produced at the site is below the applicable threshold as specified for carbon steel or for high alloy steel in accordance with the formula:

GHG emissions intensity performance threshold for crude steel = (X tonne CO2 / tonne) + (1 - % end of life scrap) x ((Y- X) tonne CO2 / tonne)

Where:

X = estimated global median value in 2018 for GHG emissions per tonne of crude steel if produced from 100% scrap

Y = estimated global median value in 2018 for GHG emissions per tonne of crude steel if produced from 100% iron ore

Guidance:

Separate thresholds are specified for carbon steel and high alloy steel in accordance with the following estimates for 2018 global median GHG emissions intensity values (see Annex 3 for discussion of data sources):

Estimated global median GHG emissions intensity for 100% scrap-based crude

steel production (t CO2 e / t crude steel)

Estimated global median GHG emissions intensity for 100% iron ore-based crude steel production (t CO2 / t crude steel)

Carbon steels 0.5 2.0

High alloy (including stainless) steels

0.625* 5.0*

* estimates for high alloy steels should be considered to be highly preliminary pending additional information.

Sample calculation based on the estimated median performance data shown above:

Threshold for carbon steel = (0.5 tonnes CO2 e / tonne) + (1 - % scrap) x (2.0 - 0.5 tonnes CO2 e / tonne)

Threshold for high alloy steel = (0.625 CO2 e / tonne) + (1 - % scrap) x (5.0 – 0.625 tonnes CO2 e / tonne)


This is illustrated in the graphs below for the range of end-of-life scrap use values from 100% to 0%:

Link to discussion and consultation question on crude steel GHG emissions intensity performance threshold adjusted to take account of the proportion of scrap used for production

Link to discussion and consultation question on the use of global median GHG emissions performance in 2018 as the basis for specifying the minimum performance threshold required for ResponsibleSteel steel

product certification

Link to discussion and consultation question on better sources of data on global GHG emissions intensity performance for crude steel

Criterion 8.7. Crude steel GHG emissions intensity threshold determination: specifications and calculation

The crude steel GHG emissions intensity performance threshold of the site is determined in accordance with the following specifications.

Link to discussion and consultation question on the specification of ResponsibleSteel accounting rules for the determination of GHG emissions intensity performance

8.7.1 GHG emissions data for the determination of crude steel GHG emissions intensity performance – general requirements

a. The GHG emissions intensity determination includes consideration of the site’s:

• Upstream indirect (Scope 3a) GHG emissions (see 8.7.2);

• Energy indirect (Scope 2) GHG emissions (see 8.7.3);

• Direct (Scope 1) GHG emissions (see 8.7.4)

Link to discussion and consultation question on inclusion of Upstream indirect (Scope 3a), Energy indirect (Scope 2), and Direct (Scope 1) GHG emissions in the determination of the crude steel GHG emissions

intensity performance for the site

b. The GHG emissions intensity determination includes consideration of the emissions of carbon dioxide

Percentage of end of life scrap in crude steel

GHG

emiss

ions

inte

nsity

(ton

nes

CO2

e/ to

nne

crud

e st

eel)

Threshold

for steel

product c

ertificatio

n

0%50%100%Percentage of end of life scrap in crude steel

GHG

emiss

ions

inte

nsity

(ton

nes

CO2

e/ to

nne

crud

e st

eel)

Threshold

for steel

product c

ertificatio

n

0%50%100%


(CO2), methane (CH4), nitrogen trifluoride (NF3), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6), using Global Warming Potential (GWP) values relative to CO2 (CO2e) with a 100 year time horizon as published by the IPCC.

c. The unit of measurement is tonnes CO2 equivalent (CO2 e).

d. External data sources are recorded together with:

• The time period to which the data apply

• The international standard, if any, used for the determination of the GHG emissions data

• Whether the data comprise:

o Source specific data (representing emissions for the production of a specific material from a specific facility of the producer, or calculated using source-specific data in relation to the relative quantities of material from specific facilities)

o Producer average data (representing emissions for the production of a specific material averaged across multiple facilities managed by the producer without consideration of the relative quantities of material from specific facilities)

o Industry average data (representing emissions for the production of a specific material averaged across multiple facilities managed by multiple producers)

o ‘Indicative’ emission factors, as for example published in ISO 14404-1:2013, ISO 14404-2:2013, or ISO 14404-3:2017.

• Whether the data includes upstream indirect (Scope 3a) GHG emissions, energy indirect (Scope 2) GHG emissions, and/or direct (Scope 1) GHG emissions

• Whether the reported data include consideration of any offsets.

e. Referenced external data sources must be publicly accessible.

f. External data must be determined in accordance with a recognised international or regional standard.

g. External data sources are reviewed at least annually and data are updated if more recent data are available.

Guidance:

Additional guidance to be developed as required.

8.7.2 Upstream indirect (Scope 3a) GHG emissions

Definition: Other indirect (Scope 3) GHG emissions that occur outside of the organisation and upstream of its activities.

The system to estimate the total GHG emissions (CO2 e) associated with materials imported to the site from outside the site boundary (i.e. upstream indirect (Scope 3a) GHG emissions) for the purpose of determining the crude steel GHG emissions intensity of the site meets the following requirements:

a. The site includes consideration of the GHG emissions for input materials constituting 95% of the site’s


total upstream indirect (Scope 3a) GHG emissions.

• GHG emissions associated with the following categories identified in the GHG Protocol asupstream (Scope 3) GHG emissions do not need to be included in the site’s estimate ofupstream indirect (Scope 3a) GHG emissions: capital goods; services; business travel;employee commuting; upstream leased assets.

• GHG emissions associated with the following input materials do not need to be includedin the site’s estimate of upstream indirect (Scope 3a) GHG emissions: blast furnace andslag additives; chemicals; desulfurizing products; electrodes; lubricants; oils; refractories;rolls.

• In addition to the above exclusions GHG emissions for input materials that collectivelyconstitute less than 5% of the site’s total upstream indirect (Scope 3a) GHG emissions(based on consideration of industry average or other credible data) do not need to beconsidered further.

b. Data for upstream Scope 3 GHG emissions for input materials includes the material’s direct (Scope 1)GHG emissions as well as its own upstream indirect (Scope 3a) GHG emissions and its energy indirect(Scope 2) GHG emissions.

c. Data are the most specific available, with source specific data used in preference to producer averagedata, and producer average data used in preference to industry average data or ‘indicative’ emissionsfactors. Industry average data or ‘indicative’ emissions factors should only be used when more specificdata are not available. Where more specific data are not available and both industry average and‘indicative’ emissions factors are available the higher of the two values should be used.

d. Where range information associated with producer or industry average data are available the top 20th

percentile figure (or estimate thereof) is used and not the average (mean or median) figure for the range.

e. The determination of upstream Scope 3 GHG emissions is exclusive of any offsets claimed by upstreamsuppliers.

f. The determination of upstream Scope 3 GHG emissions includes consideration of the GHG emissionsassociated with the transportation of input materials.

g. The site’s upstream indirect (Scope 3a) emissions may be reduced pro rata if imported materials whoseGHG emissions have been accounted for are subsequently exported from the site.

h. The determination of GHG emissions conforms with the guidance provided for specific input materials(see guidance notes and the summary table below).

Guidance:

Guidance on the determination of upstream indirect (Scope 3a) GHG emissions for specific input materials

Ferrous raw materials

Iron and steel used as input material for a ResponsibleSteel certified steel product should be sourced exclusively from ResponsibleSteel certified sites. This would include the sourcing of direct reduced iron (DRI), granulated pig iron (GPI), hot briquetted iron (HBI), and pig iron. GHG emissions data for these


materials would therefore be covered by ResponsibleSteel requirements specified in Principle 8, as applicable.

Concentrates, fines, pellets, and sinter must be sourced from sites that provide source specific or producer average GHG data.

When lump ore is sourced from a ResponsibleSteel verified supply chain source specific or producer average GHG data must be used. Industry average or indicative data may be used when lump ore is sourced from unverified supply chains and more specific data are not available.

External scrap

ResponsibleSteel distinguishes between manufacturing scrap and end of life scrap. Suppliers of external scrap are required to specify the quantity (tonnes) of scrap that is classed as manufacturing scrap and the quantity (tonnes) classified as end of life scrap.

End of life scrap is assigned an embodied GHG emissions factor of zero. The GHG emissions associated with transportation of the scrap from the commercial supply site to the ResponsibleSteel certified site gate must be estimated.

Manufacturing scrap is assigned the same GHG factor as its upstream indirect (Scope 3a) GHG emission when it was originally supplied to the manufacturing site, prior to any additional GHG emissions associated with processing at the manufacturing site. If such supplier site specific GHG data is not available the ResponsibleSteel site shall treat its GHG emissions as neutral, for the purposes of calculating the site’s current GHG emissions intensity. It should be noted that neutral is not the same as zero emissions, which is the default for end of life scrap.

Link to discussion and consultation question on ferrous scrap

Ferro alloys

ResponsibleSteel distinguishes between ferro alloys for which steelmaking is a key buyer, defined on the basis of the proportion of the material for which steelmaking constitutes more than 50% of global demand, and other ferro alloys used for steelmaking, as listed:

• Steel sector a key buyer: (Cr, Mn, Mo, Ni, Nb, V)

• Steel sector not a key buyer: (Al, B, Co, Mg, P, Si, Ti, W)

Source-specific or producer-specific average GHG data are required for ferro alloys for which steel is a key buyer. For ferro alloys for which the steel sector is not a key buyer industry average or ‘indicative’ data may be used when more specific data are not available.

Non-ferrous metals

ResponsibleSteel distinguishes between non-ferrous metals for which steelmaking is a key buyer, defined on the basis of the proportion of the material for which steelmaking constitutes more than 50% of global demand, and other ferro alloys used for steelmaking, as listed:

• Steel sector a key buyer: (Zn)


• Steel sector not a key buyer: (Al, Mg, Sn)

Source-specific or producer-specific average GHG data are required for non-ferrous metals for which steel is a key buyer. For non-ferrous metals for which the steel sector is not a key buyer industry average or ‘indicative’ data may be used when more specific data are not available.

Process coal, coke and charcoal

Source-specific or producer-specific average are required when the site uses coke as an input material.

Industry average or ‘indicative’ data may be used for anthracite, charcoal and pulverised coal for injection when more specific data are not available.

When coking coal is sourced from a ResponsibleSteel verified supply chain source specific or producer average GHG data must be used. Industry average or indicative data may be used when coking coal is sourced from unverified supply chains.

Lime, dolomitic lime, dolomite, limestone

Industry average or ‘indicative’ data may be used for lime, dolomitic lime, dolomite and limestone when more specific data is not available.

Industrial and fuel gases

Source-specific or producer-specific average GHG data are required for gases used as reductive agents for iron and steelmaking, including natural gas and hydrogen.

Industry average or ‘indicative’ data may be used for argon, oxygen, nitrogen and other industrial gases when more specific data are not available.

ResponsibleSteel certification of manufacturing site required1?

Source-specific or producer -

specific average GHG data required2?

Industry average or

‘indicative’ GHG data

permitted3?

Supply-specific transportation

data estimated?

Ferrous raw material • Concentrate ü O ü • Direct reduced

iron (DRI)ü1 ü O ü

• Fines ü O ü • Granulated Pig

Iron (GPI)ü1 ü O ü

• Hot briquettediron (HBI)

ü1 ü O ü

• Lump ore ü ü • Pellets ü O ü


• Pig iron ü1 ü O ü • Sinter ü O ü

External scrap • Manufacturing

scrap(See note 4) ü

• End of life scrap ü (zero tonnes CO2e/ tonne)

ü

Ferro alloys • Steel sector a key

buyer*: (Cr, Mn,Mo, Ni, Nb, V)

ü O

• Steel sector not akey buyer*: (Al,B, Co, Mg, P, Si,Ti, W)

ü

Non-ferrous metals • Steel sector a key

buyer*: (Zn)ü O

• Steel sector not akey buyer*: (Al,Mg, Sn)

ü

Process coal, coke and charcoal • Anthracite ü ü • Charcoal ü ü • Coke ü O ü • Coking coals ü ü • Pulverised coal

for injectionü ü

Lime, dolomitic lime, dolomite, limestone Lime, dolomitic lime, dolomite, limestone ü

Industrial and fuel gases • Natural gas ü O ü • Hydrogen ü O ü • Argon, oxygen,

nitrogen andother industrialgases

ü

Other input materials for steelmaking

Blast furnace and slag additives, chemicals, desulfurizing products, electrodes, lubricants, oils, refractories, rolls are excluded from scope of upstream GHG estimate

8.7.2.h Summary Table

Footnotes to 8.7.2.h Summary Table:

Note 1. Ore-based metallics, coke and charcoal must be sourced from sites that are certified as meeting


the applicable requirements of the ResponsibleSteel Standard for site certification. This ensures that the management of social and environmental impacts for the production of these raw materials are addressed for the full supply chain from source through to crude steel production, irrespective of whether those processes take place on- or off- the site for crude steel production itself.

Note 2. Where source-specific or producer-specific average GHG data is required the GHG emissions determination shall include determination of the Scope 1, Scope 2 and upstream Scope 3 GHG emissions for production of the material. Determination of Scope 2 GHG emissions shall be based on up-to-date national grid specific emissions data provided by the IEA where available. If grid specific emissions are not used, the default data used shall be for the top 20th percentile for global grid GHG emissions.

Source-specific or producer-specific average GHG data should be determined in conformity with the requirements of ISO 14040 & ISO 14044, or EN15804. In all cases the site shall require the supplier to provide it with the source of the GHG data provided, any standard(s) which were followed for the calculation of the data, and the time period over which data used for the determination were collected.

Note 3. Industry average of ‘indicative’ GHG data may only be used when source-specific or producer-specific average GHG data are not available. In such cases the figure used by the site for its determination must be based on conservative estimates, defined as the estimate for the top 20th decile of the estimated range. Industry average data should be determined using a recognised international or regional standard such as ISO 14040 & ISO 14044, or EN15804. In all cases the site shall require the supplier to provide it with the source of the GHG data provided, any standard(s) which were followed for the calculation of the data, and the time period over which data used for the determination were collected.

Note 4. If supplier site GHG data is used for manufacturing scrap it shall refer to the embodied GHG emissions for the steel when originally supplied to the manufacturing site, prior to any additional GHG emissions associated with processing at the manufacturing site. If such supplier site specific GHG data is not available the steelmaking site shall treat the GHG emissions as neutral, for the purposes of calculating the site’s current GHG emissions intensity. It should be noted that neutral is not the same as zero emissions, which is the default for end of life scrap.

8.7.3 Energy indirect (Scope 2) GHG emissions

Energy indirect (Scope 2) GHG emissions are determined in accordance with the following specifications:

a. Imported electricity

• GHG emissions for imported electricity are quantified in accordance with the requirements of ISO14064-1:2018 Annex E.2 Treatment of imported electricity, using the emission factor that bestcharacterises the pertinent grid, i.e. dedicated transmission line, local, regional or national grid-average emission factor.

• Grid-average emission factors should be from the emissions year being reported, if available, or themost recent year if not. Grid-average emissions factors for imported consumed electricity shall bebased on the average consumption mix of the grid from which the electricity is consumed.

• GHG emission reductions based on carbon offsets, power purchase agreements, virtual powerpurchase agreements, or green tariffs paid in relation to the site's sourcing of electricity arepermitted where these meet the requirements of ISO 14064-1:2018 E.2.2 Additional information.

• GHG reductions achieved through the use of biofuels that do not meet recognised sustainabilitystandards shall not be recognised as contributing to the achievement of the net GHG reductiontargets associated with the use of imported electricity. Recognised sustainability standards forbiofuels include the voluntary schemes recognised as meeting the sustainability criteria of the


European Union’s Renewable Energy Directive (EU) 2018/2001 (see list of approved Voluntary Schemes).

b. heating, cooling and steam

• GHG emissions for imported energy other than electricity are quantified using a source-specific emission factor.

• Emission factors should be from the emissions year being reported, if available, or the most recent year if not. Average emissions factors for imported energy shall be based on the average consumption mix of the energy generator.

Guidance:

Energy indirect (Scope 2) GHG emissions: GHG emissions that result from the generation of or purchased or acquired electricity, heating, cooling and steam consumed by an organisation (Source GRI Standards, GRI 305: Emissions. Global Sustainability Standards Board, 2016).

8.7.4 Direct (Scope 1) GHG emissions

The total direct (Scope 1) GHG emissions for the site are measured, recorded and verified in accordance with the requirements of an applicable, recognised international and/or regional standard (from 8.3.2) and in accordance with the following specifications:

a. Emissions associated with the processing of crude steel at the site

GHG emissions associated with the processing of crude steel at the site after production (for example, hot rolling, cold rolling, casting, coating) are not included in the determination of direct (Scope 1) GHG emissions for the purpose of calculating the crude steel GHG emissions intensity of the site.

b. GHG offsets

The determination of scope 1 emissions may not include carbon offsets or similar instruments.

c. Time coverage

Data collection is to be related to one year of operation and shall be representative of current steel production. The 12-month period immediately prior to the site audit shall be used as the default period, and any deviation from this shall be clearly reported and justified.

Guidance:

Direct (Scope 1) GHG emissions: GHG emissions that result from sources that are owned or controlled by an organisation.

Note 1. A GHG source is any physical unit or process that releases GHG into the atmosphere

Note 2. Direct (Scope 1) GHG emissions can include the CO2 emissions from fuel consumption.

(Source GRI Standards, GRI 305: Emissions. Global Sustainability Standards Board, 2016).

NOTE: GHG emissions associated with the further processing of crude steel at the site are considered in relation to the determination of steel product GHG allocations, covered under Criterion 8.8, below.

8.7.5 GHG emission credits and corrections

a. Reduction of emissions associated with export of by-products or co-products


There is no reduction of GHG emissions associated with the export of by-products or co-products (including, for example process gases, dust, sludge, chemicals, oils and energy), for the purpose of determining the crude steel GHG emissions intensity performance of the site.

b. Allocation of emissions for exported intermediate products

Where a site produces and exports intermediate products such as coke, pig iron or GPI for steelmaking elsewhere, the GHG emissions associated with the production of the exported intermediate products should be deducted pro rata from the site’s determination of its own crude steel GHG emissions performance.

c. Energy use for on-site processing of crude steel

GHG emissions associated with on-site processing of crude steel are not counted as emissions for the purpose of determining the crude steel GHG emissions intensity of the site.

The site should reduce its calculation of energy indirect (Scope 2) GHG emissions in accordance with the energy it uses for the on-site processing of crude steel.

d. On-site carbon capture and storage

GHG emissions that are captured and stored on site are not counted as emissions for the purpose of determining the crude steel GHG emissions intensity of the site. Where this is the case the technology used for capture and storage, and the quantity of GHG emissions captured is publicly reported.

e. Material exported from site as feedstock for downstream processing

GHG emissions that are captured on site and exported as feedstock for downstream utilisation (for example in the production of ethanol) are not counted as emissions for the purpose of determining the crude steel GHG emissions intensity of the site. Where this is the case the technology used for capture and downstream utilisation, and the quantity of GHG emissions captured is publicly reported.

There is no allocation of GHG emissions to the exported material as a co-product or by-product for the purpose of determining the crude steel GHG emissions intensity of the site.

f. Energy exported from the site

There is no reduction of GHG emissions associated with the export of energy (including, for example electricity, steam or heat), for the purpose of determining the crude steel GHG emissions intensity performance of the site.

Guidance:

NOTE: (8.7.5.a) The site may apply different rules for the purposes of allocating GHG emissions to steel products as covered by Criterion 8.8 below.

NOTE (8.7.5.c) This guidance is consistent with the focus on the GHG emissions associated with crude steel production, and avoids penalising sites that carry out energy intensive processing. However, it also means that sites that are efficient at re-using energy generated on site do not benefit from this in relation to their crude steel GHG emissions intensity performance figure.

The energy use associated with further on-site processing of crude steel is included in the determination of the steel product GHG allocation (see Criterion 8.8), so sites that are efficient at re-using energy generated on site will be able to claim and benefit from lower GHG emissions for their steel products, and pass these benefits on to their customers in terms of lower embodied GHG emissions, even though it is not considered in the determination of the GHG intensity for the production of crude steel.

NOTE (8.7.5.d)


The quantity of GHG emissions claimed as captured must be justified, and it must be demonstrated that the stored emissions will not be released to the atmosphere on a minimum 100-year time horizon.

NOTE (8.7.5.e)

The quantity of GHG emissions claimed as captured must be justified. It is recognised that the carbon ‘captured’ may be fully or partially released to the atmosphere when the products of the downstream process are used – for example as fuel, as feedstock for further industrial processes, or at their end of life disposal. It is proposed that the GHG emissions associated with such further use should be ‘owned’ downstream, and that the steelmaker should receive the full benefit in terms of the reduction of the crude steel GHG emissions intensity for its site. The implication is that the downstream users should not receive any further GHG related credit or benefit from the sale or use of such material downstream. Ethanol produced from the capture and use of process gases should be treated on the same basis as ethanol produced from other sources of material for the purpose of assessing GHG emissions associated with its production or use.

In this case a steelmaking site benefits from exporting GHG emissions to a downstream user that would otherwise be associated its own production of steel. The converse is the case when the steelmaking site exports energy (whether in the form of heat or electricity) to users beyond its site boundary, when the steelmaker continues to own the associated GHG emissions (see below).

NOTE (8.7.5.f)

This approach is consistent with the requirements of ISO 14064-1: 2018 for the treatment of exported electricity (see Annex E.3).

In this case a steelmaking site takes responsibility for the GHG emissions associated with the energy that is used by others. The converse is the case when the steelmaking site exports its by-products as feedstock for downstream carbon capture and utilisation, when the steelmaker benefits from the apparent reduction in its emissions, although these may subsequently be emitted downstream (see above).

Note that different rules may be adopted for the purposes of steel product GHG allocation, covered by Criterion 8.8 below.

8.7.6 Downstream indirect (Scope 3b) GHG emissions

Downstream life cycle considerations such as product GHG emissions in use and emissions associated with end of life disposal are excluded from the calculation of the GHG emissions intensity performance for crude steel production.

Guidance:

Downstream indirect (Scope 3b) GHG emissions: Other indirect (Scope 3) GHG emissions that occur outside of the organisation and downstream of its activities.

Consideration of downstream life cycles may be considered in relation to the allocation of GHG emissions to steel products, covered under Criterion 8.8, below.

8.7.7 The use of international or regional standards

Sites should align the collection and use of data for the determination of the ResponsibleSteel GHG intensity performance threshold as specified in criteria 8.7.1 to 8.7.6 with the collection and use of data they use to meet the requirements of other international or regional standards already in use at the site.


Where definitions or requirements specified by ResponsibleSteel differ from those used to meet other international or regional standards the definitions or requirements specified by ResponsibleSteel shall prevail for the purposes of calculating the site’s crude steel GHG intensity performance.

Guidance:


8.7.8. Measurement of scrap use and crude steel production

a. The site measures and reports the GHG emissions associated with its crude steel production in accordance with the requirements specified in Criterion 8.7.1 to 8.7.7 of this standard.

b. The site measures and records its monthly crude steel production.

c. The site measures and records on a rolling basis:

• the quantity of end-of-life scrap steel used in its production of crude steel in the previous 12 months

• the quantity of crude steel produced in the previous 12 months • the GHG emissions intensity of its production of crude steel over the previous 12

months (CO2 e / tonne crude steel) calculated in accordance with the requirements of Criterion 8.6

Guidance:


8.7.9 Calculation of crude steel GHG emissions intensity performance

The site calculates and records its crude steel GHG emissions intensity performance in accordance with the equation:

Crude steel GHG emissions intensity performance (tonne CO2 e/ tonne) = GHG emissions (tonne CO2 e) for the previous 12 months / quantity of crude steel produced in the previous 12 months (tonne)

Guidance:


Criterion 8.8. Steel Product GHG emissions data

Customers are provided with clear, consistent data for the GHG emissions that are allocated to ResponsibleSteel certified steel products, in accordance with recognised international standards.

8.8.1. The GHG emissions of steel products and co-products produced at the site are calculated in accordance with the World Steel Association (worldsteel) LCA methodology.

Guidance:

See ‘Life cycle inventory methodology reports for steel products’, World Steel Association, 2017, ISBN 978-2-930069-89-0.

The resulting steel product GHG emissions data must be publicly accessible as a requirement for ResponsibleSteel steel product certification (see Criterion 8.9).


Link to discussion and consultation question on the use of the worldsteel LCI methodology as the basis for determining steel product GHG emissions allocations

Criterion 8.9. Transparency and comparability of GHG emissions data

The site’s crude steel GHG emissions performance, allocations of GHG emissions to steel products and co-products, and the proportion of end of life scrap used in its production are made available to ResponsibleSteel for publication in a readily accessible on-line format.

8.9.1 The following data are provided to ResponsibleSteel for publication in a readily accessible on-line format:

a. the site’s crude steel GHG emissions performance (as calculated in Criterion 8.6.1)

b. the proportion of end-of-life scrap used for crude steel production (as determined in Criterion 8.7.8)

c. the allocations of GHG emissions to steel products and co-products (as calculated in Criterion 8.8.1)

Guidance:


Link to discussion and consultation question on transparency and comparability of GHG emissions data


Annex 1a (for information): Glossary (previously approved)

Already included in the ResponsibleSteel Standard v1-0, approved November 2019:

Carbon dioxide equivalent, CO2 e: Unit for comparing the radiative forcing of a GHG to carbon dioxide.

(Adopted from ISO/CD 19694-1:2016 Stationary source emissions. Determination of greenhouse gas (GHG) emissions in energy-intensive industries - Part 1: General aspects).

Crude steel: Steel in the first solid state after melting, suitable for further processing or for sale. Synonymous with raw steel.

(Adopted from worldsteel).

GHG offset: Offsets are discrete GHG reductions used to compensate for (i.e., offset) GHG emissions elsewhere, for example to meet a voluntary or mandatory GHG target or cap. Offsets are calculated relative to a baseline that represents a hypothetical scenario for what emissions would have been in the absence of the mitigation project that generates the offsets. To avoid double counting, the reduction giving rise to the offset must occur at sources or sinks not included in the target or cap for which it is used.

(Adopted from The Greenhouse Gas Protocol).

Net GHG emissions: The total GHG emissions (CO2 equivalent) assigned to a product, process or activity minus the total GHG emission reductions claimed by the site as carbon offsets or through other mechanisms.

Net-zero GHG emissions: Refers to achieving an overall balance between emissions produced and emissions taken out of the atmosphere. ResponsibleSteel will work with its membership to agree a technical definition for net-zero GHG emissions as applicable to the scope of this standard, based on ongoing work being undertaken under the auspices of the UN Global Compact.

Steel Product: Product produced from steel and shipped out from steelworks.

EXAMPLE Hot rolled steel, pickled hot rolled steel, cold rolled steel, finished cold rolled steel, electrogalvanized steel, hot-dip galvanized steel, tin-free steel, tinplated steel, organic coated steel, section, plate, rebar, engineering steel, wire rod, seamless pipe, UO pipe, welded pipe.

(Adopted from ISO20915:2018(en) Life cycle inventory calculation methodology for steel products)


Annex 1b (for consultation): Glossary (new or updated terms)

New terms proposed for inclusion in updated glossary

DRAFTING NOTE: Deletions are indicated like this. Changes are indicated like this.

Carbon intensity of electricity: the CO2 GHG emissions produced per kilowatt hour of electricity consumed.

Co-product: any of two or more products coming from the same unit process or product system

[Source: ISO 14044:2006, 3.10]

Credit GHG emission: GHG emission that corresponds to exported material and electricity or steam. (Adopted from ISO 14404:2017 Calculation method of carbon dioxide emission intensity from iron and steel production)

Direct GHG or CO2 emissions: GHG emissions (CO2 equivalent) from production facilities within the site boundary. Direct emissions correspond to ‘scope 1’ emissions as referred to in the GHG Protocol.

Direct (Scope 1) GHG emissions: GHG emissions that result from sources that are owned or controlled by an organisation.

Note 1. A GHG source is any physical unit or process that releases GHG into the atmosphere

Note 2. Direct (Scope 1) GHG emissions can include the CO2 emissions from fuel consumption.


Direct Reduced Iron (DRI): Direct Reduced Iron (DRI) is the product of the direct reduction of iron ore in the solid state by carbon monoxide and hydrogen derived from natural gas or coal.

Most gas-based direct reduction plants are part of integrated steel mini-mills, located adjacent to the electric arc furnace (EAF) steel plant. DRI can be either hot or cold charged to the EAF. Some steel companies ship DRI from their captive direct reduction plants to their remote steel mills and a small volume of DRI is sold to third parties. In India there are many small rotary kiln furnaces producing DRI, known locally as sponge iron, using coal as energy and reductant source. Some of the sponge iron plants are captive to steel mills, but there is a significant domestic merchant market, India producing 57% of its crude steel in electric arc furnaces (2016).

(Source: International Iron Metallics Association (IIMA) https://www.metallics.org, 2020).

Downstream indirect (Scope 3b) GHG emissions: Other indirect (Scope 3) GHG emissions that occur outside of the organisation and downstream of its activities.

End of life scrap: scrap from after the end of life of final products

(Source: ISO 20915: 2019(E) Life cycle inventory calculation methodology for steel products.)

Energy indirect (Scope 2) GHG emissions: GHG emissions that result from the generation of or purchased or acquired electricity, heating, cooling and steam consumed by an organisation.


Exported: in the context of the determination of GHG emissions ‘exported’ refers to energy, materials or products (including intermediate products, by-products or co-products) that leave the site across the site boundary.

External scrap: scrap provided from outside of the steelworks, including manufacturing scrap and end of life


scrap


Ferro alloy: alloy of iron with non-iron alloy metals, such as manganese, silicon or chromium used in the steelmaking process.


Final product: product that requires no additional transformation prior to its use

EXAMPLE Automobiles, building structures, building envelopes, packaging.

(Source ISO/TS 18110:2015, 2.2, modified – The example has been added.)

Global warming potential, GWP: Factor describing the radiative forcing impact of one mass-based unit of a given GHG relative to an equivalent unit of carbon dioxide over a given period of time (from EN 19694-1: 2016(E))

Note: GWP factors published by the Intergovernmental Panel on Climate Change (IPCC) shall be used.

Granulated Pig Iron (GPI): From time to time the supply of hot metal from a blast furnace may exceed the demands of the steel plant, for example due to problems further downstream. In most integrated steel mills, the blast furnace plants are not equipped with pig casters, meaning that the excess hot metal has to be cast into an open air sand pit, a process known as "pooling" or "beaching." The ensuing dust and fumes constitute an environmental hazard and the resultant pool or beach iron takes a long time to solidify before it can be crushed into usable material.

Granulation of the excess hot metal is a process that deals with these issues and produces a by-product - Granulated Pig Iron (GPI) - that can readily be used internally, for example as BOF coolant, or sold to third parties as feedstock for electric arc furnaces, cupolas and induction furnaces.


Greenhouse Gas, GHG: Gaseous constituent of the atmosphere, both natural and anthropogenic, that absorbs and emits radiation at specific wavelengths within the spectrum of infrared radiation emitted by the Earth’s surface, the atmosphere and clouds

Note to entry: GHGs include carbon dioxide (CO2) methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).

(Adopted from ISO/CD 19694-1:2016 Stationary source emissions. Determination of greenhouse gas (GHG) emissions in energy-intensive industries - Part 1: General aspects)

NOTE: nitrogen trifluoride (NF3) was added to the Greenhouse Gas Protocol list of GHGs in 2013.

Home scrap: scrap from a downstream steel production process within the steelworks (e.g. rolling, coating) that is returned to steel making processes (e.g. BOF or EAF)


Hot Briquetted Iron (HBI): Hot Briquetted Iron (HBI) is a premium form of DRI that has been compacted at a temperature greater than 650° C at time of compaction and has a density greater than 5,000 kilograms per cubic metre (5,000 kg/m3).

HBI was developed as a product in order to overcome the problems associated with shipping and handling of DRI - due to the process of compaction it is very much less porous and therefore very much less reactive than


DRI and does not suffer from the risk of self-heating associated with DRI.

The principle market for HBI is electric arc furnace (EAF) steelmaking, but HBI also finds application as a trim coolant in basic oxygen furnace (BOF) steelmaking and as blast furnace feedstock.


Imported: in the context of the determination of GHG emissions ‘imported’ refers to energy or materials that are brought into a site from outside of the site boundary.

Industrial gas: gas for steel production other than fuels (3.17) or reducing agent

EXAMPLE Oxygen, nitrogen, argon, hydrogen, carbon dioxide, compressed air.

Note 1 to entry: Hydrogen can be used as a fuel, or is included here as an industrial gas when used as an uncombusted industrial gas, e.g. for the provision of reducing atmospheres in production processes.


Intermediate product: the product when an input material undergoes processing on site before being used in subsequent processes. For example, coke may be produced on site from coking coal as an intermediate product prior to its use in the blast furnace. Intermediate products may be used in subsequent processes on site, or may be exported from the site for use outside of the site boundary.

Internal scrap: scrap from a crude steel making unit process that is then recycled within the same unit process [e.g. basic oxygen furnace (BOF) or electric arc furnace (EAF)]

(Source: ISO 20915: 2019(E) Life cycle inventory calculation methodology for steel products.

Manufacturing scrap: scrap from the manufacturing processes of final products, such as automobiles and buildings


Other indirect (Scope 3) GHG emissions: indirect GHG emissions not included in energy indirect (Scope 2) GHG emissions that occur outside of the organisation, including both upstream and downstream emissions.


Pig iron: Pig iron is the product of smelting iron ore (also ilmenite) with a high-carbon fuel and reductant such as coke, usually with limestone as a flux. Charcoal and anthracite are also used as fuel and reductant. Pig iron is produced by smelting or iron ore in blast furnaces or by smelting ilmenite in electric furnaces.


Process gas: Gas that is produced as part of the processes on the steel production site

EXAMPLE Coke oven gas, blast furnace gas, BOF gas.


Scope of GHG emissions: Classification of the operational boundaries where GHG emissions occur

Note I: Scope classifies whether GHG emissions are created by an organization itself, or are created by other related organizations, for example electricity suppliers or logistics companies.

Note 2: There are three classifications of Scope: Scope 1, Scope 2 and Scope 3.

Note 3: The classification of Scope derives from the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD), ‘GHG Protocol Corporate Accounting and Reporting Standard’, Revised Edition, 2004.


Scrap: iron and steel material in metallic form that is recovered in multiple life cycle stages, including steel production processes, the manufacturing processes of final products and the end of life of final products, and is recycled as a raw material for steel production


Metric tTonne (T): A metric tonne, equivalent to 1,000 kilograms or 2,204.6 pounds or 1.1023 short ton

(Adopted from worldsteel)

Upstream indirect (Scope 3a) GHG emissions: Other indirect (Scope 3) GHG emissions that occur outside of the organisation and upstream of its activities.

Waste: Any substance or object which the holder discards or intends or is required to discard.

(Adopted from EU Guidance on the interpretation of key provisions of Directive 2008/98/EC on waste)

Waste: materials disposed of in landfills, both internal and external to steel works, or incinerated.



Annex 2 (for information): Principle 8. Climate Change and Greenhouse Gas Emissions requirements in approved Standard

Already included in the ResponsibleSteel Standard v1-0, approved November 2019:

Criterion 8.1: Corporate commitment to achieve the goals of the Paris Agreement

The site’s corporate owner has defined and is implementing a long- and medium-term strategy to reduce its greenhouse gas (GHG) emissions to levels that are compatible with the achievement of the goals of the Paris Agreement, with an aspiration to achieve net-zero GHG emissions through work with policy makers and others.

8.1.1. The site’s corporate owner ascribes publicly to a credible, long-term emissions reduction pathway for the steel industry as a whole that is compatible with the achievement of the goals of the Paris Agreement, and which includes:

a. Explicit projections of long-term steel consumption;

b. Explicit projections for the production and use of primary as well as recycled steel, and the associated GHG emissions; and

c. Explicit assumptions in relation to the public policy and other key conditions on which it is based.

8.1.2. The site’s corporate owner has defined and made public both a long-term emissions reduction pathway and a medium-term, quantitative, science-based GHG emissions target or set of targets for the corporation as a whole. The corporation's emissions reduction pathway and medium-term parget(s) are compatible with the long-term emissions reduction pathway it ascribes to for the steel industry, and the projections for the production of primary as well as recycled steel as applicable to its own portfolio of sites.

8.1.3. The site’s corporate owner has a credible, documented strategy for the achievement of its corporate level GHG emissions target(s), outlining the timeline for change across its portfolio of sites and identifying the conditions that would need to be in place for the successful implementation of the strategy, and the specific actions, including policy engagement, it is committed to take to help bring these conditions about.

8.1.4 The corporate owner reviews the implementation of its strategy on a regular basis, documents the findings of the review, and updates the strategy to take account of the review’s findings.

8.1.5 The review shows that the corporate owner is implementing its strategy effectively over time.

Guidance:

(8.1.1) An emissions reduction pathway for the steel industry that is compatible with the goals of the Paris Agreement is one which limits the global average temperature to well below 2°C above pre-industrial levels and supports efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

(8.1.1) Long-term in this context means a time horizon of 15 to 35 years.

(8.1.2) Medium-term in this context means a time horizon between 5 and 15 years from the present time.

(8.1.1, 8.1.2) Medium- or long-term refers to the time measured from the start of the relevant implementation period. For example, a ten-year (medium-term) target set seven years ago is still valid even if it has only three years still to run. However, if a medium-term target expires during the period of


validity of a certificate, this would create a non-conformity with the requirement of the standard unless it is replaced by an updated medium-term target.

(8.1.2) A science-based target (SBT) validated by the SBTi (Science Based Targets initiative) would be sufficient to meet the requirements of 8.1.2. Other quantitative, scientifically justified targets (or sets of targets, for example for separate processes) may also be recognised, as long as the ambition, quality and coverage of the target is comparable.

(8.1.3) Specific actions may also include investments at the corporate or site levels, building of pilot facilities to develop, test and scale up new technologies, proposition to seek funding through ‘green bonds’, general commitments to upgrade sites over a period of time, etc.

Criterion 8.2: Corporate Climate-Related Financial Disclosure

The site’s corporate owner is implementing the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

8.2.1. The site’s corporate owner has allocated responsibility for oversight of climate-related risk and opportunity to at least one board committee, with an understanding that material climate-related risks and opportunities that impact business strategy will need to be discussed at the full board level.

8.2.2. The site’s corporate owner has a documented commitment in place to implement the core recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) according to its four pillars - Governance, Strategy, Risk Management, and Metrics and Targets - in accordance with applicable TCFD guidance, within three years of the date of application for the site’s certification.

Guidance:

Task Force on Climate-Related Financial Disclosures (TCFD): Final Report: Recommendations of the Task Force on Climate-Related Financial Disclosures, June 2017.

TCFD guidance: Implementing the Recommendations of the Task Force on Climate-Related Financial Disclosures, June 2017.

Implementation in accordance with applicable TCFD guidance requires that the corporate owner makes the recommended disclosures associated with the four core recommendations.

The ResponsibleSteel period of certification is three years. Sites owned by corporations which have not implemented the TCFD recommendations within three years of the date on which their first site applied for certification would not be issued with any further certificates. The failure would also jeopardise the maintenance of any other current site certifications of the corporate owner.

Criterion 8.3: Site-level GHG emissions measurement and intensity calculation

The site measures and records key aspects of its GHG emissions in accordance with a recognised international or regional standard.

8.3.1. There is a system in place to estimate the total GHG emissions (CO2 e) associated with materials imported to the site from outside the site boundary.


8.3.2. The total direct GHG (CO2 e) or CO2 emissions for the site are measured, recorded and verified in accordance with the requirements of an applicable, recognised international and/or regional standard.

8.3.3. For sites that produce crude steel, the GHG emissions intensity for the crude steel produced (metric tonnes of CO2 e/ metric tonne crude steel) is calculated in accordance with the requirements of an applicable, recognised international and/or regional standard.

Guidance:

(8.3.1) The system to assess upstream emissions should include a screening of imported materials to identify those that may be associated with significant GHG emissions such as mined materials or hydrogen where relevant.

(8.3.1) As a minimum, the site must consider the GHG emissions associated with the materials listed in ISO 14404-1:2013 Table 2 and other materials that may be associated with significant GHG emissions. A material’s GHG emissions are not considered to be significant if there is evidence that they are likely to constitute less than 5% of the total GHG emissions associated with all of the materials imported to the site from outside the site boundary.

(8.3.1) The estimate may make use of emission factors such as those referenced in ISO14404 or from other secondary sources where no other reliable data are available. Where such secondary data or emission factors are used, these data must be referenced in the public report specified in 8.5.1 below. More resources should be committed to estimating the more significant sources of emissions, for example through the collection of emissions data from suppliers.

(8.3.1 - 8.3.2) In cases where pig iron or steel (other than scrap metal) itself is imported to the site from upstream sites, the associated GHG emissions must be accounted for using primary data specific to the site of production and must not be based on generic or secondary sources of data. The site must ensure that GHG emissions associated with imported pig iron or steel are clearly and explicitly included in the calculations of GHG emissions and are included in the calculation of GHG emissions intensity in 8.3.3.

(8.3.2) ResponsibleSteel currently recognises the following international or regional standards:

• The GHG Protocol and EN 19694 (parts as applicable) for measurement of GHG emissions by steelmaking and other sites.

• ISO 14404 (parts as applicable) for the measurement of CO2 emissions by steelmaking sites, as applicable.

Criterion 8.4: Site-level GHG reduction targets and planning

There is a medium-term GHG emissions target and plan for the site that is aligned with the achievement of the corporate owner’s corporate level GHG emissions target(s).

8.4.1. There is a time-specific, medium-term target for the GHG emissions for the site or defined portfolio of sites that is at or below the trajectory required for the corporate owner to achieve its medium-term carbon emissions target for all of its sites, as specified under requirement 8.1.2.

For steelmaking sites, the target is defined in terms of the GHG emissions intensity of crude steel production (metric tonnes of CO2 equivalent/ metric tonne crude steel) calculated in accordance with the international or regional standard as specified in 8.3.3.

8.4.2 There is a time-specific, medium-term target to reduce the net GHG emissions associated with the


site’s use of imported electricity, where the GHG emissions associated with the use of imported electricity are significant.

8.4.3. There are plans in place, approved by senior management, to achieve the site’s GHG emissions target(s) within the specified timelines as defined in 8.4.1 and 8.4.2. The plans include:

a. Time-specific milestones for each target from present through to the achievement of the medium-term target levels;

b. Explicit quantification of the site’s reduction of direct GHG (CO2 e) or CO2 emissions required to achieve the target(s) specified under 8.4.1.;

c. Specification of the international or regional standard that will be used to measure progress towards the target, and a description of the elements that are included or excluded from consideration (e.g. whether upstream scope 3 emissions are considered, and how any emissions associated with the site’s products, co-products, by-products or waste are to be taken into account);

d. Consideration of the technology, equipment, management system changes or other options to achieve the targets over time;

e. Consideration of the costs of installing any specified technology or equipment;

f. Consideration of the proposed mechanism for financing the proposed technology or equipment;

g. Consideration of external conditions that will need to be in place for the plan to be successfully implemented, or conditions that might prevent successful implementation.

8.4.4. Progress on the implementation of the plans is monitored and reported to the site’s board or equivalent oversight body on a regular basis, including an explanation of relevant issues such as changes to production in response to market conditions, closures for repairs or other significant factors, and the plans are updated if appropriate.

8.4.5 The site’s medium-term targets, as specified under requirements 8.4.1 and 8.4.2 and progress towards achieving these targets are reported publicly and on a regular basis.

Guidance:

(8.4.1) The site-level target must itself be below the average trajectory required to achieve the corporate owner’s overall corporate level target, OR, if this is not the case, the corporate owner must show that its whole portfolio of sites meets the requirements of 8.4.1 to 8.4.5, and so demonstrate that in combination its sites are on track to achieve its corporate level target.

(8.4.2) This requirement could be met, for example, through targets for: the purchase of electricity from low or zero carbon sources, carbon offsets, power purchase agreements, virtual power purchase agreements, or green tariffs paid in relation to the site's sourcing of electricity. GHG reductions achieved through the use of biofuels that do not meet recognised sustainability standards shall not be recognised as contributing to the achievement of the net GHG reduction targets associated with the use of imported electricity. Recognised sustainability standards for biofuels include the voluntary schemes recognised as meeting the sustainability criteria of the European Union’s Renewable Energy Directive (EU) 2018/2001 (see list of approved Voluntary Schemes).

(8.4.2) Where a site introduces a new technology that has a major impact on reducing its direct emissions but results in an increase in the amount of imported electricity, the baseline for reducing net emissions for the imported electricity is set when the new technology is introduced.

(8.4.2) GHG emissions associated with imported electricity are considered significant if they represent


more than 10% of the site’s total (direct and indirect) GHG emissions.

(8.4.2) Where imported electricity is generated from the use of the site’s own co- or by-products (e.g. process gases) whose GHG emissions have already been accounted for under 8.4.1, the GHG emissions for this imported electricity are considered to be zero for the purpose of calculating net GHG emissions under 8.4.2.

(8.4.2) Where offsets are used the offsets must be consistent with a specified, recognised international or national standard or regulation and must be publicly reported (see 8.5.1). The implication is that sites would have broad freedom to select their own approach to reducing net GHG emissions, and deciding what level of verification might be required to support their approach, so long as the approach is consistent with a recognised standard. Examples of recognised standards include:

• ART-TREES Standard, operational from 2020 under the emergent Forest Finance Facility;

• The National Carbon Offset Standard in Australia

(8.4.2) Low-carbon energy procurement must be consistent with a specified, recognised international or national standard or regulation and must be publicly reported (see 8.5.1). Examples of recognised standards include:

• The quality criteria set in the GHG Protocol Scope 2 guidance;

• The RE100 credible claims guidance.

(8.4.3) The content of the site’s plans are considered to be commercially confidential and shall not be disclosed by ResponsibleSteel or any auditors acting to verify compliance with the requirements of the ResponsibleSteel standard. The specified medium- to long-term targets and progress towards their achievement would, however, be reported.

(8.4.1, 8.4.2) the medium-term plan should cover activities planned for the following five to fifteen years, in accordance with the site’s financial and operational planning cycle. Longer te

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